Chesapeake Energy 2012 Annual Report Download - page 22
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12
Costs Incurred in Natural Gas and Oil Property Acquisition, Exploration and Development
The following table sets forth historical costs incurred in natural gas and oil property acquisitions, exploration and
development activities during the periods indicated:
Years Ended December 31,
2012 2011 2010
($ in millions)
Acquisition of Properties:
Proved properties .................................................................................. $ 332 $ 48 $ 243
Unproved properties .............................................................................. 2,981 4,736 6,953
Exploratory costs ..................................................................................... 2,353 2,261 872
Development costs .................................................................................. 6,733 5,497 4,741
Costs incurred(a)(b) .............................................................................. $ 12,399 $ 12,542 $ 12,809
___________________________________________
(a) Exploratory and development costs are net of joint venture drilling and completion cost carries of $784 million,
$2.570 billion and $1.151 billion in 2012, 2011 and 2010, respectively.
(b) Includes capitalized interest and asset retirement cost as follows:
Capitalized interest .................................................................................. $ 976 $ 727 $ 711
Asset retirement obligations ..................................................................... $ 32 $ 3 $ 2
As of December 31, 2012, there were no PUDs that had remained undeveloped for five years or more. In 2012,
we invested approximately $1.035 billion, net of drilling and completion cost carries of $86 million, to convert 961 bcfe
of PUDs to proved developed reserves.
A summary of our exploration and development, acquisition and divestiture activities in 2012 by operating division
is as follows:
Gross
Wells
Drilled
Net
Wells
Drilled
Exploration
and
Development
Acquisition
of Unproved
Properties
Acquisition
of Proved
Properties
Sales of
Unproved
Properties
Sales of
Proved
Properties Total(a)
($ in millions)
Southern .. 363 183 $ 1,060 $ 181 $ 12 $ (50) $ — $ 1,203
Northern... 942 441 3,055 559 14 (838) (1,098) 1,692
Eastern .... 578 264 1,785 1,727 — (731) (7) 2,774
Western ... 718 384 3,186 514 306 (1,800) (1,356) 850
Total.... 2,601 1,272 $ 9,086 $ 2,981 $ 332 $ (3,419) $ (2,461) $ 6,519
___________________________________________
(a) Includes capitalized internal costs of $410 million and related capitalized interest of $976 million.